North Korea Revalues Currency

By choxx231 on December 3, 2009 12:03 PM

North Korea revalued its currency for the first time in 50 years on Tuesday, restricting the amount of old money for trading it to a new money. The Reuters reported the government lopped two zeroes of the value of its currency, replacing the 1,000-won notes with 10-won notes. The government's action was to break down the black market, which became an important part of the market trading system in the country, reported the New York Times. Nicholas Eberstadt, political economist and North Korea scholar at the
American Enterprise Institute in Washington said, "It's another way of limiting, harassing and punishing people who have
had the bad political sense to engage in market activity." The sudden revaluation and exchange limits of the new money created chaos among people, leaving most of the old North Korean won worthless,Washington Post reported. According to the Wall Street Journal, the banks and offices were packed with North Koreans, asking for information and trying to exchanges or trade existing North Korean
won for euros and U.S. dollars. Marcus Noland, a senior researcher at the Peterson Institute for International Economics in Washington said,
"It's basically a way of rewarding your friends and punishing your enemies."